RERA helps bring down land rates in Navi Mumbai

Mumbai city news: Currently, the prices in New Panvel range from Rs3,500 to Rs6,500 per square feet

The Real Estate (Regulation and Development) Act has lowered land rates in Navi Mumbai by 25%-40% compared to the last auction.

In the current realty market, the land prices consume 50-70 % of the total project costs. (Pic for Representation)

In the recent auction conducted by City and Industrial Development Corporation (CIDCO), it was able to garner Rs245 crore by tendering six plots in New Panvel. This time the rates ranged from Rs65,250 per square metre to Rs96,000 per square metre which is low compared to the Rs1.25 lakh per square metre it commanded during the last auction.

According to Manohar Shroff, vice president, MCHI-CREDAI (Navi Mumbai),it was a RERA effect at play. “The RERA does not allow builders to sell apartments till they obtain all requisite approvals. This has kept speculators at bay and now serious builders with proper plans are entering the field,” said Shroff.

In the current realty market, the land prices consume 50-70 % of the total project costs. According to real estate consultant Mohan Arora, any reduction in land prices has a cascading effect on the final prices. “Such decrease will only have a cascading effect and the result will be more affordable housing stock in the market,” said Arora.

Currently, the prices in New Panvel range from Rs3,500 to Rs6,500 per square feet. The RERA disallows any sale till it gives a nod.

In addition, the builder has to disclose his entire construction plan as well as the time line about when he would give possession of the apartments. There are severe penal clauses in the Act against errant builders and brokers.

According to Liases Foras, a real estate research firm, exorbitantly priced land pieces are a menace to the realty sector. “Those projects have never taken off in which the builder pays exorbitant land rates,” said Pankaj Kapoor, CEO, Liases Foras.